Oil tanker rates are at their highest in at least 25 years thanks to strong fuel demand and Russia sanctions disrupting traditional trading routes
- Rates for tankers carrying refined fuels reached their highest in at least 25 years.
- Fuel tankers earned more than $40,000 a day for the last 14 weeks, Bloomberg reported.
Tanker rates for refined fuels are at their highest in at least 25 years boosted by strong demand for fuel and longer trading routes after Russia invaded Ukraine, according to media reports.
Fuel tankers earned more than $40,000 a day for the last 14 weeks, Bloomberg reported.
Though demand for fuel has taken a blow recently as fears of a global recession circle investors' minds, there is still strong appetite in the market for Russian energy, especially among Asian buyers. Countries like China and India have been snapping up energy on the cheap from Russia ever since it kicked off its war, putting Moscow on track to earn $285 billion from its oil and gas sales this year.
Higher demand for fuels means increased bookings for tankers, thereby boosting shipping rates.
Meanwhile, Western sanctions on Russian energy and reduced flows of oil, coal and natural gas from Russia to the European Union in retaliation has squeezed supply in the refined product market and raised prices across the board, which has subsequently bolstered tanker rates.
Global benchmark Brent crude futures have risen nearly 43% since this time last year and soared to a near 14-year high this year of more than $130 a barrel in early March.
Tanker rates have also benefitted from hugely disrupted trade routes after sanctions on Russia's exports have diverted flows to new market, particularly in Asia and Latin America from traditional markets such as Western Europe.
Strong tanker rates are likely to see further gains as more sanctions toward Russian oil supplies are due to come into effect later this year.